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Punching Above Their Weight

New England states excel in two measures of competitiveness.

Portland Head Lighthouse, Maine

Photo: Getty Images

by GARY DAUGHTERS

From a distance, the results may seem surprising, but New England is the dominant force in not just one but two recent rankings of the 50 states. Four of the six New England states found homes in the Top 10 of the 15th annual State Competitiveness Index, published by The Beacon Hill Institute for Public Policy Research (BHI), formerly part of Boston’s Suffolk University. Three states in the region are found in the Top 10 of an exhaustive “Best States” survey, released at the end of February, by U.S. News and World Report.

Tellingly, Massachusetts, formerly maligned as “Taxachusetts,” finished tops in both surveys, garnishing high marks in areas including education, healthcare, technology and strength of overall economy. Among other New England states to crack Beacon Hill’s Top 10, New Hampshire ranked 4th, Rhode Island 8th and Vermont 9th, while Maine placed in the Top 20. The U.S. News survey ranked New Hampshire 2nd and Vermont 10th.

The BHI Competitiveness Index, known in the field as a “productivity index,” is based on a set of 43 indicators divided into eight sub-indices: government and fiscal policy, security, infrastructure, human resources, technology, business incubation, openness and environmental policy. The ranking, says the Institute, is distinct from more narrowly focused surveys that are limited to such metrics as taxes and economic freedom.

“The strength of the index is that all the variables are democratic in weight,” says Frank Conte, project manager for BHI’s State Competitiveness Project. “It tries to pick up some indicators that point to economic growth. There’s a balance. We’re not a strictly a high technology index or a tax index.

“The New England states,” Conte tells Site Selection, “do well in our index because they invest in human capital. They benefit from a strong educational base, which translates to higher personal income.”

Why Massachusetts?

Massachusetts earned its top ranking in the BHI index on particular strengths in four of the study’s eight indices. Owing to a high number of residents with health insurance and low infant mortality rates, Massachusetts placed first in human resources. It topped BHI’s technology rankings for its large base of science and engineering graduates and high-tech employment, ranked 7th for openness and 9th for business incubation. Massachusetts has locked down the top spot in the BHI index each year since 2011.

“The New England states do well in our index because they invest in human capital.”

— Frank Conte, The Beacon Hill Institute for Public Policy Research

For its “Best States” survey, U.S. News partnered with McKinsey & Company, which developed a Leading States Index based on 68 factors under such headings as economic opportunity, healthcare, education, infrastructure, crime and government. To achieve its No. 1 ranking, Massachusetts finished first nationally in education, first in Internet access, second in healthcare, and fifth for its overall economy. The magazine’s Brian Kelly, Editor and Chief of Content for U.S. News, noted that Massachusetts “is a collection of some of the best hospitals [and] medical researchers in the world. The second thing they’re really good at is education, and people say that education matters.”

New Hampshire Rides Tech Wave

New Hampshire’s second-place ranking by U.S. News and fourth-place finish in the BHI index came from strong showings in economic opportunity, security of its citizens and technological progress. The Granite State has quietly been building out a high-tech infrastructure, and has long claimed itself as the birthplace of advances such as the Segway Human Transporter, the fax machine and the world’s first video game.

As if to demonstrate New Hampshire’s expanding technology reach, tech firms are filling up space in the “Silicon Millyard,” a vast array of formerly abandoned red brick buildings in the state’s biggest city, Manchester.

The Millyard’s tech tenants, which number more than 30, include Autodesk and Texas Instruments, along with incubators and startups such as Dyn (rhymes with “wine”), an Internet performance management company that last year raised $50 million in Series B venture capital funding. Dyn, which recently was acquired by tech giant, Oracle, has seen its payroll at the Millyard jump from a handful of workers to more than 330 full-time staffers. Despite the November acquisition by Oracle, Dyn has signaled that it plans to stay put in Manchester.

Rhode Island finished just out of the Top 20 in the U.S. News survey, but like New Hampshire, used strong showings in security and technology to secure its eighth-place spot in the BHI ranking. Also like New Hampshire, it’s seeing a boost in high-tech development, most recently in the form of investments from GE Digital, Virgin Pulse, Johnson & Johnson and Wexford, which is developing an innovation hub in Providence’s Innovation and Design District (aka “the I-195 land”) expected to be home to 1,000 new jobs.

Vermont, which ranked in the Top 10s of both surveys, did so with strengths related to crime and security, healthcare, education and technology, for which it was ranked third-best in the country by BHI.

“Vermont has a lot going for it in terms of a skilled workforce,” says BHI’s Conte. “They’re a small state so they’re punching above their weight. They’ve found ways to sustain their personal income.”

Boston, Massachusetts

Photo: Getty Images

Gary Daughters
Senior Editor

Gary Daughters is a Peabody Award winning journalist who began with Site Selection in 2016. Gary has worked as a writer and producer for CNN covering US politics and international affairs. His work has included lengthy stints in Washington, DC and western Europe. Gary is a 1981 graduate of the University of Georgia, where he majored in Journalism and Mass Communications. He lives in Atlanta with his teenage daughter, and in his spare time plays guitar, teaches golf and mentors young people.